Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


Firm Establishes NSRs on 14 Projects, Creates New Gold Royalty Company
Research Report

Share on Stocktwits


A Haywood Securities report notes the moves by GoldMining "demonstrates an intention to seek to unlock further value from GOLD's unique portfolio."

In a June 24 research note, Haywood Securities analyst Colin Healey reported that GoldMining Inc. (GOLD:TSX; GLDLF:OTCQX) will create net smelter returns royalties (NSRs) between 0.5% and 2% on 14 of its gold projects and hold them in its newly formed, wholly owned subsidiary, Gold Royalty Corp.

"GoldMining is taking the first step in positioning its portfolio for increased visibility to investors of royalty streaming companies which tend to trade at a substantial premiums to the respective net asset values [average of 1.7x net asset value)," Healey commented.

Now, existing and investors can get exposure to the new company, which should generate demand for the stock and, thus, put positive price pressure on it. Haywood recommends buying GoldMining to "take advantage of the unwarranted market discount and new catalyst."

As for a breakdown of the 14 NSRs, there are two at 2%, 11 at 1% and one at 0.5%. They all are on projects at various stages, most with an established contemporary resource but no economic study. Defined gold resources of all of the projects amount to about 25.2 million ounces.

"Establishing the NSRs upfront, prior to negotiating any specific transaction on a specific asset, allows GoldMining to set the baseline for basis and unified terms of the NSRs," Healey highlighted.

The Vancouver-based junior resource firm also benefits from keeping the royalties in a wholly owned subsidiary, according to Healey. One, it creates a future catalyst in the form of a spin out of Gold Royalty Co. Two, GoldMining maintains control in the event of negotiations with another entity interested in acquiring one or more of its assets. Three, the company continues to have exposure to future discoveries and resource growth at its projects.

Haywood has a Buy rating and a CA$4.25 per share target price on GoldMining, a high bar Healey noted because his firm believes that "management could execute and unlock additional value in the stock." Haywood considers the GoldMining team, with its creativity and capital markets experience, to be one of GoldMining's "core strengths."

"We think this move demonstrates an intention to seek to unlock further value from GOLD's unique portfolio and investors will be rewarded in a flat or rising gold price environment," the analyst concluded.

GoldMining's shares are trading today at about CA$1.68 each.


1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: GoldMining Inc. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Haywood Securities, GoldMining Inc, June 24, 2020

Analyst Certification: I, Colin Healey, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures
The following Important Disclosures apply for GoldMining Inc.: N/A

Research policy available here.

Want to read more about Gold and Base Metals investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe